635-3460
FAX: 635-9674

- Accounting

& Preparation

BRIAN G. PERRY

Certified. General Accountant
2 - 4644 Lazelle Avenue
Terrace, B.C. V8G 4A6

Income Tax Consulting

- Data Processing

. Revenue

MONEY SUPPLEMENT, 1990, PAGE 5

T4 slips are missing

Here’s what to do about it

T4 slips are an absolute must

' to show how much you earned

and how much your employer
withheld for income tax,
Canada (or Quebec) Pension
Plan and unemployment in-

' surance.

Without them, you just can’t
complete your tax return

_ properly.

Most employees make sure
they go out on time, often well
before the end-of-February

deadline. They know they'll be
in trouble from Revenue
Canada if they don't,

But what if ‘the TAs don’t
come? Obviously, Revenue
Canada advises, the first thing
is to chase your ‘employer(s).

If you're still out of luck by the
April 30 filing deadline, es-
timate the amounts involved
(from your pay slips if you were
smart enough to keep them).
Chances are, if your estimates

Electronic tax returns
under going trial run

Canada _ has
launched a pilot project to
study electronic filing of in-
come tax returns likely to lead
to paper-less payments some-
where down the road.

Revenue Minister Otto
Jelinek says the Winnipeg

project is designed to find out if

a nationwide electronic filing
system would “reduce costs, in-
crease efficiency and improve
and simplify the service to tax-
payers,”

There’s no word as to painless
payments however.

On December 11, 1989, the
federal governinent tabled tH
the House of Corimons the

relating to savings for retire-
ment. The measures tabled
were basically the same as .
those proposed in 1988 and in-
cluded in the April 1989 .

‘budget. The most notable

long over-due tax measures ~

features were the increased con-

tribution limits, changes in the

‘definition of earned income

and changes in the roll-over —
provisions. |
CONTRIBUTION LIMITS
The contribution limits to a
Registered Retirement Savings
Plan (RRSP) remain the same
for 1989 and 1990. The limit is
20% of earned income, to a
maximum of $7,500, for in-

dividuals who are not members

of a Registered Pension Plan

(RPP) or Deferred ‘Profit Shar-

ing Plan (PPSP). For in-

either-of these plans, the limit
is 20% of earned income to a

‘maximum of $3,500, less any

contributions made By an in-
dividual to an RPP. ,
Commencing in 1911, the

‘RRSP. contribution limits for
_ individuals who are not
~ members of: RPPs or DPSPs

dividuals who are members of i" .

IC
wd

Sat

become 18% of the prior year’s -

earned income to a specific
dollar maximum, which is
phased in as follows:

1991 $11,500
1992 12,500
. 1993. 13,00
1994 14,500
1995 15,500

After £995 the maximum
limit will be indexed for infla-

- tion,

The contribution limits for.

“individuals who are members
_ Of RFPs or DPSPs will be, 18%,
of the previous year's earned . - a4
+ +;,.-1income.to.the dollar maximums
_- listed above, minus an amount

called the ‘‘pension a

- adjustment’’ (PA). The PA for

these individuals is basically the
total of all employee and

employer contributions made in-

the previous calendar year to
RPPs and DPSPs. The
employer will be responsible
for getting the PA information
to the employee. .

In addition to the increased
limits from 1991 the proposals
introduce a new seven year
carry forward period. Starting
in the 1991 taxation year, the
unused portion of your RRSP
contribution limit can be car-
ried forward up to seven years.

eg. A young family may skip

. _ RRSP contributions in order to
' pay down their mortgage. The

“Seven Year Carry Forward’’
will enable them to make up
for missed contributions up to
seven years after the year in ~
‘which they were missed. .

Aik LIS. EARNED

: ~The: alld abiedimit for your
"RRSP contribution is determin-

ed by your earned income for
the taxation year. For the 1989
taxation year, earned income is
defined as follows: .
® salary or wages before the
deduction of RPP contribu-
tions but after the deduction of
other employment expenses.
@ income from certain types
of royalties

_ ® income from carrying on a
business

- Revenue Canada’s General Tax Guide is designed to tell you
everything you need to know as you complete your 1989 return. if
you don't get yours in the mail, it’s available at post offices.

UPDATE ON PROPOSED 1 TAX MEASURES RELATED TO RETIREMENT SAVINGS

- @ net rental income from real
property

 @ payments from, supplemen-
“ary unemployment benefit
plans

@ alimony or maintenance
payments —

@. net research grants

@ superannuation or pension
benefits, retiring allowance,
death benefits, and amounts
received from RRSPs, DPSPs
and income from RRIFs.
(These types of income will be
excluded from earned income
after 1989).

Earned income is reduced by
the following:

@ losses from carrying on a
business
@ net rental losses from real

' property
@ deductible alimony or main-
tenance payments
® most transfers to RPPs or
RRSPs _

The proposed reform } will
have the most immediate im- __
pact on individuals rolling cer:
tain types of income into a
RRSP. 1989 is the last year
that Periodic Pension ipcome,
Canada Pension Plan payments
and Old-Age Security can be
rolled over tax-free intq a
RRSP. An exception’ to this .
restriction is a transitional pro- ©:
vision which will apply from
1989 to 1994. It will allow the
transfer of up to $6,000 of in-
come from a RPP or a DPSP
to a spousal RRSP.

Lump-sum pension payments
may only be transferred tax-
free on a direct plan to plan
basis.

The deadline for doing your
annual contribution or an in-
direct rollover for 1989 is
March 1, 1990,

FsiCiy Trust

are reasonable: they'll be ac-

cepted and you're in the clear.

How does
it happen?

Revenue Canada says there .

are several reasons for no-show
T4s, Maybe you changed jobs
and moved and didn’t tell your
employer where you would be.
Or maybe the employer went
bankrupt, in which case, ask

the trustee in bankruptcy for

the form.

Or some small firms just
vanish with all their records. If
that happens in your case,
write a letter of explanation to
the tax man with your return.

Or maybe you and your
employer parted bad friends.
and the employer just won't co-
operate with the T4s. If that
happens to you, tell Revenue
Canada the story in a letter
with your return and they'll do
the rest.

Japanese banks
dominate in
assets stakes

Times have changed i in the

“world’s biggest banks” league.
Not too many years ago, U.S.
banks held just about all of the
top 10 places measured in U.S.
dollars and three Canadian

banks weren't a long way be- .

hind. But no more. .

Now, according to the :latest
ranking available, it’s the
Japanese who lead the field —
with eight out of the top 10.
Biggest of all is Dai-Ichi Kan-

gyo Bank with 1988 assets of

$352 billion U.S. Only non-
Japanese banks to figure in the

top 10 are Credit Agricole of

France in ninth place and
Citicorp (U.S.) in tenth.

Frank Donahue
Phone: 635-2887

‘Retiring? |
- Ican help you
through the
RRIF and

Annuity maze.”

“Whether you want ihe
security of a guaranteed
income annuity, the flexibility

to change your retirement
income as your needs
change, or a balance of the
two, | can heip. For personal
service, call me.”

Ri The Mutual Group

Facing Tomorrow
Together

Licensed with Mutual Lifeol Canada/Mutuat
Investes Inc,, two of The Mutual Group,“